Pass-through Rates: Saving Money on your Business Energy Bills

One of the main ways Intelligent can save your business money on utility contracts is by performing a full review of your bills and finding ways you can reduce your outgoings through fixed energy or pass-through rates.

An energy bill is formulated by two payments; an energy payment based on your gas and/ or electricity usage and additional variable pass-through rates set by third parties; these pass-through rates often make up between 40 to 60% of your entire energy bill.

Although your energy cost is a projection of your yearly energy usage for a supplier to buy wholesale at the beginning of the year, pass through rates are variable depending on your meter type, location, as well as type of business. These pass-through rates often rise in contrast to a fixed energy tariff, and contribute toward the infrastructure of energy, covering the transportation of energy, upkeep of National Grid and its ability to maintain the supply and demand of electricity balanced constantly. As well as climate change and low carbon initiative programs.

These pass-through rates are not produced or controlled by a supplier, rather they are subject to decisions by the Government, energy regulator Ofgem and any third parties involved; metre reading costs. The pass-through rates can fluctuate depending on Government legislation, for example COP26 pledges may raise the climate action rates.

Due to pass through rates not depending on energy usage, initial pricing can often neglect the full charges of a bill, leaving business owners surprised at the full energy outgoing. At Intelligent we make sure our partners utility bills are entirely transparent in order to find an ideal contract for our partners business energy usage.

Furthermore, VAT charges are included in pass through rates, which are automatically implemented to 20% on an energy bill, however, some kinds of businesses are VAT exempt and therefore can reduce the total outgoings on an energy bill.

For a full review of your business’ energy utility bills, get in contact today and we can find out where to save your business money.